June-July 2004

Are you getting your money’s worth from your insulating glass unit (IGU) fabrication system? To find out, you need to determine a cost/performance ratio using the moisture vapor resistance index (MVRI).
The MVRI provides a relational index showing the relative performance of its three factors: moisture vapor transmission path (MVTP), moisture vapor transmission rate (MVTR) and float. Because it is a relational index, MVRI does not contain units, but in general, a higher MVRI indicates higher resistance to moisture penetration.

• Total unit cost–the total cost to produce one IGU; includes unit material, labor and overhead costs;
• MVTP–width of the seal in inches from the outside to the inner IGU air space; represents the distance permeating moisture must travel to reach the inner air space;
• MVTR–average figure in grams per square meters per 24 hours; measures the passage of moisture through a barrier;
• Float–film thickness in inches between the impermeable glass and the impermeable portion of the spacer; it’s generally the sum of the two spaces through which moisture permeates. (If the spacer does not have an impermeable layer, the float equals the spacer width.);
• MVRI–multiply the MVTR by the float and divide the MVTP by this figure; and
• Cost/performance ratio–divide the total unit cost by the MVRI.

The cost/performance ratio analyzes the cost per unit level of performance in a system. This ratio provides a comparison figure among system and material combinations to determine how to produce IGUs with the highest level of unit performance per dollar of manufacturing cost. Fabricators achieving a low ratio are able to offer their customers higher quality at the lowest cost per level of performance.

Cost/Performance Analysis
Production processes and material choices vary greatly and should be examined individually. Therefore, a general example is cited here to demonstrate the elements in a cost/performance ratio analysis.

Materials. Company A makes 24- by 36-inch IGUs with 0.5 inch air spaces fabricated on the totally automated T.A.P.E.-AT fabrication system using a TruSeal warm-edge flexible IG spacer.
When analyzing your system, remember to include all materials used in the manufacturing process, such as corner keys, desiccants, sealants and even sealant wastage that might occur during start-up and shutdown procedures.

Labor. Various fabricating systems offer different levels of production efficiencies, which are highly dependent on the number of operators required to run the system. Unit labor costs represent the wage costs for a given time period spread out over the number of units produced. To calculate unit labor costs, multiply the number of people required by the per-man wage cost and divide this figure by the number of units produced per hour. Company A requires three operators to produce 1,200 units per shift: one to load the washer, one to place muntin bars and one to offload completed
IGUs.

Overhead. Manufacturing overhead normally includes all costs associated with operating the factory, including indirect materials,
indirect labor, utilities, property taxes, insurance, equipment depreciation, repairs, maintenance and costs associated with utilizing the desired floor space. In addition, indirect costs relate to raw materials–unloading materials, processing paperwork and delivery to the production floor–will also add to the total unit cost.

As all of the elements of overhead vary significantly from business to business, the unit overhead cost
only includes equipment depreciation. Therefore, unit overhead cost is determined using the following calculations: first, divide the equipment depreciation amount per year by the number of workdays per year to calculate depreciation per day; then divide depreciation per day by the number of units produced per day. Remember to add other
factory overhead costs in your final analysis.

Total Unit Cost. Use concrete figures (shown as estimated percentages in Table 2 for Company A) in your analysis to determine the total unit cost for purposes of comparing your IG manufacturing system with other systems. Then move to the MVRI calculation described above to determine the cost/performance ratio.
You can compare various system MVRI measurements and cost/performance ratios by plugging their corresponding numbers into the formulas above.